In the wake of last week's lower-than-expected U.S. inflation, the dollar dipped toward a 15-month low against its main counterparts on Tuesday as investors watched new triggers to assess the potential for downside.

The index had its lowest week of 2023 last week post figures revealed that US inflation had decreased further and that consumer prices had experienced their smallest annual gain in more than two years. That reduced pressure on the Federal Reserve to keep raising interest rates.

The Fed is expected to raise rates by 25 basis points at its policy meeting later this month, although rates are already almost fully priced in by the money markets.

EUR/USD touched the highest level in 17 months at of $1.1276.

GBP/USD ticked up by 0.3% to $1.3115, close to the previous week $1.3144, considered the highest in 3 months.

USD/JPY added 0.4% to 138.215 per dollar, investors are anticipating a probable shift away from the Bank of Japan's (BOJ) ultra-dovish policy stance as it comes up for discussion at its monetary policy meeting next week.